They were not eligible for TARP. They were in such a sorry state before the EO 2008 that they would not have qualified.
If you look at how management worded their 2008 annual presentation, they said they "evaluated" TARP, but decided against applying. That is BS. Given their condition at the time, TARP would have been the BEST (and as it turns out, only) option, but they did not qualify. You would have to be a crackhead to be in the condition they were in and not take TARP, if eligible. Even then, there were no alternatives. Nobody was willing to put fresh capital in the bank.
Thus, my conclusion is that they were not eligible, they knew it and tried to fluff themselves up for some greater fool. They told everybody that they decided against pursuing TARP, that they were properly reserved and that they had options at their disposal. They knew they were in trouble, but they were between a rock and a hard place. They chose the cowardly way out.
Great strategy, guys. It really paid off. Well, paid off for anybody short, at least.
There were just too many red flags waving. I hope I was able to save others the pain of investing in this s(t)inking ship.
A shame that a bank that has been around this long was imploded by irresponsible dolts. I kept screaming about Nevada.... and I still believe it was that part of the portfolio that cost them the most in the end.
Predictions: 1. Some dork long will be in here pumping this thing between now and seizure. 2. Dem will try to explain again why reserves and charge-offs don't matter (actually, they won't after May 31st). 3. Ed Swotek, should he remain employed, will tell some hapless shareholder that TONE is properly reserved. 4. Someone will mention the improved footing Tone will be on after the GW asset and branch sale closes.